June 25, 2016

Brexit Brings Buyers’ Remorse

Many people in the United Kingdom went to bed Thursday night feeling safe and woke up yesterday feeling they were in serious danger after the 52-percent vote for the UK to leave the European Union. EU leaders want Britain to move forward immediately to avoid further financial instability throughout the world, but leaders of the Leave campaign seem nervous about their win, perhaps because of the advantageous trade relationships between UK and EU.

Boris Johnson said that they’d rather not take any immediate steps, perhaps because he hopes to use the vote as leverage for becoming prime minister. He could even allow the UK to stay in the EU. People who voted for leaving the EU are now wishing they could change their vote, agreeing with one British voter who said she voted to leave but “I never thought it would actually happen.”

People who voted in favor of leaving the EU should feel remorseful. Predictions show a one percent drop in GDP, a fall of £19 billion equivalent to £720 (over $1,000 in US dollars) for each UK household. Each households could annually be £4,300 a year worse off by 2030. Prolonged uncertainty, reduced access to the single market, and decreased investment from overseas are joined by the banks’ loss of “passporting” rights to conduct business throughout the EU. In the hours after the vote was announced, the British pound’s 11-percent decrease hit a 31-year low against the dollar. A British recession seems likely because businesses usually defer spending during uncertain times. A bleak economy causes consumers to stop spending on big-ticket items. The collapsing pound will drive up inflation, cutting into incomes. Some jobs will disappear, and wage growth will fall.

The Cornwall area that soundly voted against staying with the EU is now worried about the annual loss of at last £60 million that it received in the past decade. European money provided infrastructure, universities, and broadband internet for them, and farmers and fishers had benefited from the EU policies. New trade deals between the EU and the UK mandate approval and unanimity by over 30 European, national, and regional parliaments that may be able to act only after national referendums. Goods leaving the UK will face tariffs, and everyone leaving the island will be forced to go through customs just to travel to Europe.

Both Northern Ireland and Scotland want to leave the UK in order to stay in the EU, and Spain wants to take back Gibraltar from the UK. After 95.9% of people in Gibraltar voted to stay with the EU, Spain renewed its claim that Gibraltar is its territory, something that Spain has declared for three centuries since the 1713 Treaty of Utrecht. People living in Gibraltar are British citizens with British passports, but they also want to be part of the EU.

The economy of countries around the world started to take big hits. The world’s 400 richest people lost $127.4 billion yesterday, 3.2 percent of their total net worth. In Canada, the loonie had its biggest drop in 18 months to around 76.8 cents. U.S. Oil fell by 3 percent. Asia’s stock market started the fall after the vote, followed by other main indices which fell by about 10 percent. In the U.S., Friday’s Dow Jones industrial average fell 611 points, causing a loss of $160 million in market value. Big corporations on the S&P index lost $627 billion–just yesterday. It could have been much worse, but this is only the beginning. The drops also hurt retirement funds. Tighter financial conditions makes it harder and more expensive for people and businesses to get money—less borrowing, less investing, and less economic activity.

Touting his new golf course in Scotland, Donald Trump saw the results through the prism of Donald Trump’s business ventures. The New York Times reported that his business interests “still drive his behavior, and his schedule. He has planned two days in Scotland, with no meetings with government or political leaders scheduled.” The Republican’s itinerary “reads like a public relations junket crossed with a golf vacation,” complete with “a ceremonial ribbon cutting.”

Trump didn’t even know that Scotland had overwhelmingly voted against leaving the EU: he said they were celebrating because “they took their country back.” NBC’s Katy Tur asked him whether he was traveling with any of his foreign policy advisors who talked to him about the vote. He said that he’d been in touch but that “there’s nothing to talk about.” Instead of talking about the vote, he talked about the golf course and its refurbished holes, plumbing, putting greens, and zoning. Asked about Brexit’s undermining the British pound value, he said that the decline is good news for him.

“If the pound goes down, more people are coming to Turnberry, frankly. For traveling and for other things, I think it very well could turn out to be positive.”

People traveling from the U.S. may get a better deal for their dollars, but the U.S. economy can suffer depressed exports because of the weak English pound and the possible ramifications in the EU. U.S. banks said Brexit could force an overhaul of their business in the U.K. It doesn’t happen all at once, but the dominos are falling.

Trump’s business ventures in Scotland bulldozed through its elected officials and land owners, and Trump sued the Scottish government to break environmental laws and obtain property through eminent domain. Scottish officials allowed Trump to flatten a third of the Foveran dunes complex, a legally protected site of special scientific interest. Whenever he couldn’t get permits, he built anyway.

The neighbors of his golf courses roundly despise Trump because he tried to tear down what he called their “ugly” houses. He called their houses “ugly” and wanted to tear them down. When they refused to leave, he built a tall earthen wall that blocked their view of the dunes and beach and put up a locked gate that blocked the public road to reach the beach. Security staff sit in 4×4 vehicles watching all their movements.

Trump claims that the Scottish people “love” him, but 200-300 protesters appeared with a mariachi band during his press conference at the golf course and threw red golf balls with swastika symbols on the ground. In the background, neighbors of both his golf courses flew the Mexican flag in solidarity with other peoples who he has denigrated.

Many people in the UK had no idea what the EU was before the vote or what the connection between the UK and the EU meant to everyday people. Like Donald Trump, the Leave campaign scapegoated immigrants and created a culture of hatred because of economic inequality. They also accused the country’s leaders of being the elite and maintained that “experts” know nothing. The Leave slogan was “Take Back Control.” Since 2010, the austerity measures of the Conservative Party slashed the social safety net and left deprivation in its place.

As in the United States, British leaders are increasingly purchased by corporate and financial interests. Democratic rights, promised by the Leave campaign, were taken by the wealthy and corporations that control the country’s politics and economy. The loss of the EU will worsen the situation for workers who no longer guaranteed the EU rights, and Conservative Party control will only exacerbate their problems. Less regulated British corporations will cause more environmental damage and more mistreatment of employees and customers. Like the U.S., the media fed the paranoia and the fear.

Is “Texit” next? Daniel Miller, head of the Texas Nationalist Movement, hopes so. In his revisionist history that overlooks the area’s original Hispanic (and of course Native American) residents, Miller said, “We come from a heritage of people that carved an empire out of a wilderness.” The TNN calls for a referendum, as one in the UK, to vote on secession from the U.S. The “Republic of Texas” goes farther, maintaining that Texas never ceded sovereignty to the U.S. when it joined the union in 1845.

“If there is anything that can be learned from the UK’s political fight over the past months, it’s that alienation, fear-mongering and a deep distrust of other nations can create a perfect storm of political action that can lead even usually reasonable people to go against compassion, unity and progressive causes….

“Americans who reject all that Donald Trump stands for will want to make sure that doesn’t happen in the United States come November and will hope that the UK can serve as a wake up call for Americans who felt disengaged from the political process.”

Centrist political parties will reap what they sow if they slyly invoke nationalist and racist sentiments for their own purposes.

Williams calls for another vote—perfectly legal—for those people who suffer buyers’ remorse. The vote to leave the EU is not legally binding, and the deal is not set in motion until Article 50 is invoked. Over 2 million people have already signed the petition on the official UK Parliament website for another vote, a number well over the mandatory 100,000-signature level to force a debate in Parliament. The high volume of traffic caused the website to temporarily crash. Ironically, the petition had been placed earlier by a Leave supporter who was afraid that the referendum would support staying with the EU.

If Trump is elected this fall, however, the U.S. has no way back. An ignorant, megalomaniacal dictator will be in charge. Those who think that one person cannot make a difference should ask people in Scotland.

I would hope after November there aren’t people like that “British voter who said she voted to leave but “I never thought it would actually happen.”” and vote for Trump on a similar quixotic and deadly whim.